Audio By Carbonatix
South Africa has no immediate plans to retaliate against the United States over tariffs announced by President Donald Trump this week and will instead seek to negotiate exemptions and quota agreements, senior government officials said on Friday.
Trump imposed a 31% tariff on U.S. imports from South Africa on Wednesday, when he announced a 10% baseline tariff on all imports and higher targeted duties on dozens of countries.
The United States is South Africa's second-largest bilateral trading partner after China.
Africa's most industrialised nation has said previously that it wants to agree a bilateral trade deal with Trump's team. That looks to be a tall order, however, after the U.S. president's repeated attacks on South Africa since his return to the White House in January.
"To say we will impose reciprocal tariffs without first understanding how the U.S. arrived at 31% ... would be counterproductive," trade minister Parks Tau told a press conference, saying South Africa's average tariff on imports was 7.6%.
Foreign affairs minister Ronald Lamola, meanwhile, said Trump's tariffs effectively nullified the benefits African countries had enjoyed under the African Growth and Opportunity Act.
The AGOA initiative, which grants qualifying African nations duty-free access to the U.S. market, is due to expire in September. And Trump's far-reaching tariffs suggest that a renewal of the trade accord enacted in 2000 is now unlikely.
The actions by the United States underscored the need for South Africa to accelerate efforts to diversify its export markets, the ministers said, mentioning markets in Asia and the Middle East as potential opportunities.
In the meantime, they said the government would seek to support industries most affected by the tariffs, including car manufacturing, agriculture, processed foods and metals.
The government will not remove benefits U.S. carmakers enjoy under its Automotive Production Development Programme, a production incentive scheme, Tau said.
South Africa's National Treasury estimates that losing its AGOA status could reduce economic growth by less than 0.1 percentage points.
The central bank has modelled several scenarios related to South Africa's access to U.S. markets, with the impacts ranging from under 0.1 percentage points to 0.7 percentage points depending on the severity of the trade barriers and how badly financial market sentiment is affected.
Trump's latest tariffs are in addition to the 25% imposed on all vehicles and car parts imported into the U.S. That is a particular threat to South Africa, which exports over $2 billion a year in vehicles and auto parts to the U.S.
Latest Stories
-
World Bank pushes regional health strategy to close financing gaps in West and Central Africa
7 minutes -
Britney Spears pleads guilty to reckless driving after arrest
11 minutes -
Parentage, not paternity: Ghana’s proposed compulsory paternity testing bill sparks fears of discrimination against mothers
12 minutes -
Samsung family pays off record $8bn inheritance tax bill
17 minutes -
Spain seizes record amount of cocaine in Atlantic Ocean, authorities say
19 minutes -
Two killed and many injured after car driven into crowd in German city of Leipzig
25 minutes -
KiDi drops another summer jam ‘Signature’ featuring Lasmid
28 minutes -
UAE accuses Iran of renewed drone and missile attacks
29 minutes -
Giuliani recovering from pneumonia and ‘now breathing on his own’
32 minutes -
Blake Lively and Justin Baldoni settle lawsuit over It Ends With Us film
34 minutes -
Devastating fire destroys house in Okpoi Gonno
46 minutes -
Korle Bu doctors suspend strike action after management intervention
1 hour -
Diaspora African Forum commits to advancing Ghana’s diplomatic agenda
1 hour -
BoG’s negative equity doesn’t mean it is policy insolvent – Attah Issah
1 hour -
Deliver or lose the deal – Roads Minister issues final warning to non-performing contractors
1 hour